Mikhail Mishustin: 23 in the consolidated budget and, quite
right, 30 in the federal budget. Thus, 2018 was the peak year of this five-year
period. In fact, taking into consideration all the budget-forming taxes, this
trend continues into the first quarter of 2019. I do not mean the growth is 23
percent – the consolidated budget grew by 12.2 percent compared with the first
quarter of 2018. But if you look at the main types of budget-forming tax revenue,
profit tax grew by 14.1 percent, personal income tax by 7.8 percent, which is
1.7 percent above nominal wage growth – approximately 6.1 percent in January and February.

The growth
of insurance premiums has also been notable at 10 percent. And the VAT – it has
been showing a fairly steady collection trend for many years – is up 11
percent.

Vladimir Putin: What about the minerals extraction tax?

I am
asking because we are in the process of a tax maneuver. How much revenue has
the minerals tax generated?

Mikhail Mishustin: We collected 1.478 trillion in minerals
extraction tax in the first quarter of 2019, up 15.8 percent from the corresponding period, the first quarter of 2018.

The most important thing is that tax
revenue is sufficiently stable; with the indicators that we have, we can see
that they fit perfectly with the macro projection given to us. All is going according
to the plan.

It is also very important that many
companies have legalised their economic activities. In fact, we have recorded a minimum number of companies that can be described as fly-by-night operations with
signs of fictitious activity. They account for less than 5 percent of the total
number of operating businesses. There are around 4 million legal entities
currently in operation, and they account for about 187,000. So it can be said
that the use of fly-by-night operations in the activities of legal entities is becoming
a thing of the past.

Vladimir Putin: What about the self-employed? A special tax regime was introduced in pilot
mode in several regions: Moscow, Moscow Region, Tatarstan.

Mikhail Mishustin: Yes. Kaluga Region as well. The experiment is progressing. We have a lot of people, over 60,000 professionals who have voluntarily registered as self-employed
taxpayers.

Vladimir Putin: Is that the number in these regions?

Mikhail Mishustin: In these regions, yes. The leader is Moscow, followed by Moscow Region,
then Tatarstan, then Kaluga Region. In fact, we already have more than 3.5
billion rubles accounted for – the turnover of the registered participants in this experiment, meaning the so-called legalisation is underway. We believe
that the experiment is progressing quite successfully.

We are also working with online
platforms, with aggregators that provide services, such as Yandex.Taxi.
Sberbank along with many others, and our website and mobile app have this function
for those who officially register: they create their own window and immediately
become a user of any aggregator system. We will report to you on the results of this experiment. Many regions are asking us to expand the scope of this experiment;
many want this opportunity to be made available where they are as well.

Vladimir Putin: Is the number of cash registers increasing? And how do people use the benefits available to them when purchasing cash registers?

Mikhail Mishustin: The number of cash registers is increasing. On average, the pre-reform figure
has doubled. We have more than 2.3 million cash registers in the country and more than 800,000 legal entities that have installed them.

I can say that this technology has
become popular. Business owners also like it, because they can keep track of what is going on, they have an online system. And what is very important, many
today are counting on us to cancel tax declarations, as we promised, for companies that use cash registers and a simplified tax system. Such initiatives
are being prepared. We are currently working with our information systems. Our
taxpayers are very active.

As for benefits, generally, they are
being used quite actively. We will present the figures to you when we process
all the data, we will give you the number of those who took advantage of this
benefit. It was 18,000 before.

Vladimir Putin: Good.

Mikhail Mishustin: I would like to say a few more words about our work with major
taxpayers. Over the previous year, we have registered extraterritorially eight
interregional sector-based tax inspectorates. These are for the largest
taxpayers, with turnover exceeding 35 billion rubles. The economy is changing.
We have established such interregional inspectorates in several categories, such
as the digital economy, transnational companies, and foreign companies that have
contributed more than 50 percent to the authorised capital of Russian
companies. Importantly, they provide for taxes to be administered on an extraterritorial
basis. This means the company can use its legal entity account on the system and not visit the tax inspectorates for any services or issues.

Another important form of interaction, tax monitoring, is becoming increasingly popular. We have recently
reported to the Prime Minister that as many as 44 of our largest companies had agreed
on such tax monitoring with the tax inspectorate. It is a special form of interaction with the tax service, without on-site tax audits in exchange for complete
transparency of the major taxpayers’ accounting systems. We can actually follow
our large companies’ operations online. So today, these companies contribute about
12.5 percent of the federal budget’s tax revenue.

The Prime Minister instructed us to expand this experiment. We believe this gives tax certainty to companies, and we hope that it will be convenient enough for our taxpayers, because in fact their
interaction with the tax inspectorate is reduced to a minimum if everything is
in order in terms of risk criteria.

In conclusion, I would like to report to you on our system, which went into commercial operation. It is a unified system of civil registration operated by the Federal Taxation Service since
October 1, 2018.

Until recently, people had a lot of problems if they needed some official letter or certificate, and even had to visit the office where their birth was recorded. Today, a single cloud platform
has connected virtually all the registry offices in a single chain. Moreover,
their number has decreased from about 6,500 before the reform to 4,200. Today,
this technology is absolutely centralised. We have already registered around 2.7
million vital records since October 1, 2018. We are also developing a system with
the Federal Statistics Service for federal executive authorities to access this
information through interdepartmental electronic interaction. Rosstat, in turn,
interprets it as new forms of statistics, now combined in a unified registry
office.

Vladimir Putin: Good. It goes back about eight years, doesn’t it?

Mikhail Mishustin: No, right now, we started working online since October 1, 2018, but if
everything goes well, a retroconversion from 1926 will be completed in the next
2.5 years. We will need to process, digitise and enter into the system the vital record archives. Russian regions are engaged in this work in accordance
with the adopted legislation. I hope that this will also become a good basis
for a single population register of the Russian Federation.